SCOTUS: Statutory Time Limits Suffice, No Laches in Copyright

Twenty-nine years after the film about Jake LaMotta's life was released, the daughter of Frank P. Petrella, who penned two screenplays and co-authored a book about the late boxer, brought suit, alleging copyright infringement.

Twenty-nine years. In that time, witnesses died, alleged agreements disappeared, the transferred rights to the original works were renewed by Pamela Petrella, and MGM Grand invested heavily in the movie, signing distribution agreements with online and broadcast video providers.

The district court and allegedly pro-Hollywood Ninth Circuit held that she waited too long, and that the equitable doctrine of laches barred her from bringing suit, but the Supreme Court reversed this morning, noting that the statute of limitations and other statutory remedies controlled, and that applying laches to rewrite a statute would be an unprecedented expansion of the equitable doctrine.

Ginsburg + 5: Stick to the Statute

In an opinion joined by known textualist Scalia (and four others), Justice Ruth Bader Ginsburg gave hope to Ms. Petrella by holding that the statute, and the statute alone, controls:

"The expansive role for laches MGM envisions careens away from understandings, past and present, of the essentially gap-filling, not legislation-overriding, office of laches. Nothing in this Court's precedent suggests a doctrine of such sweep. Quite the contrary, we have never applied laches to bar in their entirety claims for discrete wrongs occurring within a federally prescribed limitations period. Inviting individual judges to set a time limit other than the one Congress prescribed, we note, would tug against the uniformity Congress sought to achieve."

The majority took pains to highlight the numerous limitations on a latecomer's assertion of copyright infringement, such as the three-year retrospective limit on damages and the infringer's ability to deduct any "investment shown to be attributable to its own enterprise, as distinct from the value created by the infringed work." Judges may also consider the delay in determining an appropriate damages award or injunctive relief.

In other words, the delay won't bar a lawsuit via laches, but it may limit any possible remedy. Think more settlements, less summary judgment.

As for concerns over the fairness of allowing a defendant to wait for a company to turn a property into profit before bringing suit, Ginsburg seemed untroubled:

"It is hardly incumbent on copyright owners, however, to challenge each and every actionable infringement. And there is nothing untoward about waiting to see whether an infringer's exploitation undercuts the value of the copyrighted work, has no effect on the original work, or even complements it. [...]

If the rule were, as MGM urges, 'sue soon, or forever hold your peace,' copyright owners would have to mount a federal case fast to stop seemingly innocuous infringements, lest those infringements eventually grow in magnitude."

Breyer + 2: Let Courts Fix Inequity

The wait-till-it-pays problem is exactly what irked Justice Breyer, who penned a dissent on behalf of himself, Chief Justice Roberts, and Justice Kennedy. He began with a citation to copyright giant Justice Learned Hand, who noted in 1916 that it may be

"inequitable for the owner of a copyright, with full notice of an intended infringement, to stand inactive while the proposed infringer spends large sums of money in its exploitation, and to intervene only when his speculation has proved a success."

Breyer goes on to cite the problems that arise from delays (lost evidence, mainly) and notes that by waiting, the defendant could end up spending immense sums of money over decades, without turning a profit, only to do so and find himself in a courtroom, where a plaintiff is only seeking the last three years' receipts, which are the only profits from the endeavor. (Imagine a digital re-release, streaming agreement, or remake of an old film, for example.) Breyer cites cases from the music and real estate industries as examples of the harm of waiting.

"Long delays do not automatically prove inequity, but depending upon the circumstances, they raise that possibility," he argued. "The Court holds that insofar as a copyright claim seeks damages, a court cannot ever apply laches, irrespective of the length of the plaintiff 's delay, the mount of the harm that it caused, or the inequity of permitting the action to go forward."

Related Resources:

• Petrella v. Metro-Goldwyn-Mayer, Inc. (Supreme Court)
• 9th Cir: Daughter's Delay in Filing Copyright Claim is Raging Bull (FindLaw's Ninth Circuit Blog)
• The Supreme Court is Partisan. Should We Care? (FindLaw's U.S. Supreme Court Blog)